Firms 'must stay lean post-recession to avoid rebounding costs'

Companies that have implemented cost reduction initiatives during the recession have been warned that phasing out such programmes could lead to the return of high expenditure.

Analysis from KPMG has estimated that £90 billion worth of returning and additional costs will impact on British businesses if they place their post-recession focus too exclusively on increasing top-line figures.

In many cases, this would wipe out the savings achieved as a result of recessionary belt-tightening, with short-term thinking and a lack of adequate cost control isolated as the main risks.

Martin Scott, partner for KPMG Performance & Technology, said that by contrast, organisations which adopt a sustainable approach to savings will benefit from competitive advantages and a better long-term performance.

"UK firms need to look hard at their existing business and operational models and challenge complacency if cost-cutting is to be a long-term lifestyle choice, not a crash diet," he explained.

Earlier this year, research from eyefortransport suggested that supply chain managers in the hi-tech and electronics industry feel a greater onus than ever to ensure their businesses are functioning cost-effectively.

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